The 2% provider tax applies to health care providers, hospitals, surgical centers, and wholesale drug distributors on their gross revenues for patient services. Some services are excluded from gross revenues under the statute.

Under federal law, states can use state or local tax dollars transferred from local units of government to fund their Medicaid programs. The money transferred can be used as the state Medicaid match to draw down the federal Medicaid match.

This bill exempts supplemental or enhanced payments made through intergovernmental transfers from gross revenues subject to the provider tax.

Effective retroactively for gross revenues received on or after July 1, 2016.